Real Estate Companies to Spend $2.25 Million in Settlement of Joint EPA and HUD Enforcement Action for Failing to Disclose Lead Paint Information to Mass. and Conn. Tenants

Joint News ReleaseU.S. Environmental Protection Agency - New England Regional OfficeU.S. Department of Housing and Urban Development
(Boston, Mass. – March 27, 2009) – A large, Boston-based real estate corporation, The Community Builders, Inc. (TCB), and nearly two dozen associated property owners have agreed to pay a $200,000 penalty and spend more than $2 million in lead paint abatement work at residential properties to settle an enforcement action brought by the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Housing and Urban Development (HUD).

This agreement resolves EPA and HUD’s allegations that TCB and the owners failed to inform tenants that their homes might contain potentially dangerous levels of lead -- in violation of the federal Lead Disclosure Rule -- at properties in eleven Massachusetts and Connecticut communities.

The settlement is the result of closely coordinated enforcement actions by EPA and HUD against TCB and 23 associated property owners. TCB is a Massachusetts non-profit corporation that develops, finances, and manages affordable, mixed-income housing. TCB manages almost 100 properties containing about 7,700 housing units in numerous cities throughout the eastern half of the U.S. The company specializes in large-scale, low-income housing redevelopment projects, many of which are financed using public and private monies under a federal low-income housing tax credit program.

"Children’s exposure to lead paint is a serious public health issue in New England. A large proportion of housing in this region was built before 1978 when use of lead paint was banned," said Ira W. Leighton, acting regional administrator of EPA's New England office. "Landlords play an important role in helping to prevent lead poisoning by following lead paint disclosure requirements and making sure families are aware of potential lead hazards in homes."

"This action sends a clear message to landlords and home sellers that they have a responsibility to tell tenants and home buyers about potential lead hazards" said Jon L. Gant, Director of HUD’s Office of Healthy Homes and Lead Hazard Control. "Housing should be both affordable and safe for families − we won’t sacrifice our children’s futures."

The alleged violations involved in this settlement arose out of almost 300 separate lease transactions between TCB and the property owners, and their tenants from August 2003 to March 2006. EPA and HUD discovered the violations after a lengthy investigation, including a review of records provided by TCB under a 2006 EPA subpoena issued pursuant to the Toxic Substances Control Act. The violations occurred at TCB-managed housing in New Haven and Vernon, Connecticut and in the Massachusetts communities of Boston, Fall River, Gloucester, Holyoke, Lawrence, Lexington, Springfield, Westfield and Worcester. Information available to EPA and HUD does not indicate any child was lead poisoned as a result of the violations, although, many of the properties where violations were found contained lead-based paint.

Under the terms of this settlement, one of the largest administrative cases filed under the Lead Disclosure Rule, TCB will pay the $200,000 civil penalty, to be split equally between EPA and HUD. In addition, the settlement requires that TCB and the property owners carry out at least $2,050,000 in lead-based paint abatement in residential housing over several years. This work, intended to provide substantial public health and environmental benefits, will include window replacement, abatement of lead-based paint on interior and exterior “friction and impact surfaces,” and other measures to mitigate lead-based paint hazards. Under the agreement, TCB must hire certified inspectors/risk assessors to conduct clearance examinations to ensure that all work is done properly.

Lead exposure causes reduced IQ, learning disabilities, developmental delays, reduced height, poorer hearing, and a host of other health problems in infants and young children. Many of these effects are thought to be irreversible. In later years, lead-poisoned children are much more likely to drop out of school, become juvenile delinquents and engage in criminal and other anti-social behavior. At higher levels, lead can damage a child's kidneys and central nervous system and cause anemia, coma, convulsions and even death. According to the Centers for Disease Control and Prevention (CDC), about 310,000 of the nation's 20 million children under the age of six have blood lead levels high enough to impair their ability to think, concentrate and learn.

The purpose of the Lead Disclosure Rule is to provide renters and purchasers of pre-1978 housing with information about the risks of lead-based paint in general and known lead-based paint hazards in specific housing, so that they can make informed decisions about whether to lease or purchase the housing.

Specifically, federal law requires that parties who sell or rent housing built before 1978: 1) Provide a lead hazard information pamphlet to inform renters and buyers about the dangers associated with lead paint; 2) Include lead notification language in sales and rental forms; 3) Disclose any known lead-based paint and lead-based paint hazards in living units and provide available reports to buyers or renters; 4) Allow a lead inspection or risk assessment by home buyers; and 5) Maintain records certifying compliance with the law for a period of three years. Under the law, EPA and HUD are both charged with enforcing the Lead Disclosure Rule.

This case is one of hundreds of lead-related civil and criminal cases EPA New England and HUD have taken as part of a collaborative effort among federal, state and municipal agencies and grassroots organizations to make sure property owners, property managers and real estate agents are complying with the federal Lead Disclosure Rule.